Regulators from around the world took to microphones all over Washington this weekend to deliver a blunt message to executives at the largest banks: stop whining, particularly about capital requirements.
"If some institutions feel pressure today, it's because they have done too little for too long rather than being asked to do too much too soon," said Mark Carney, who leads Canada's central bank and chairs the Bank for International Settlements' Committee on the Global Financial System.
At least as unsympathetic was Andrea Enria, the chairman of the European Banking Authority, who followed Carney on the stage of the Institute of International Finance's annual meeting Sunday.
"These issues have been settled," Enria said. "Just live with it."
Stefan Ingves, the Swedish central banker who just took over as chairman of the Basel Committee on Banking Supervision, left no doubt policymakers are deliberately seeking fundamental change.
"Let me stress that the whole idea is that these new [rules] will bind, and that means they are likely to change the structure of the financial sector. That was meant to happen," Ingves told the Bretton Woods Committee's international council meeting Friday.
Lest it appear the regulatory hard-line belongs only to foreigners, listen to Bill Dudley, the president of the Federal Reserve Bank of New York.
"As we move to implement financial reform, we should not be dissuaded by those who argue that the costs of reform are too high or that the job is simply too difficult," Dudley said at the Bretton Woods meeting, sponsored by Deloitte. "The fundamental point that the financial system needs to be changed in profound ways should be broadly accepted at this point."
A lot of bankers remain in denial.
JPMorgan Chase & Co.'s chief executive, Jamie Dimon, reportedly re-delivered his "Basel III is anti-American" tirade to Carney in a closed door meeting this weekend, while his lieutenant, Jes Staley, gave a sanitized version of the ideas on stage at the IIF meeting Sunday.
"If you are a diversified player in the financial industry, you are clearly penalized in terms of the surcharge around G-SIFIs (globally systemically important financial institutions)," said Staley, the CEO of JPMorgan's investment bank. "You are also clearly penalized if you are large. You are also clearly penalized if you have a robust activity in the capital markets...
"Rather than a simple level of capital of 8% across the board, applied everywhere universally, we are trying to tweak and micromanage the financial industry. I think that will create the unintended consequences."
Staley was echoed by Gary Cohn, president of Goldman Sachs Group, Bob Diamond, CEO and chairman of Barclays and Josef Ackermann, chairman of Deutsche Bank.
The executives said regulators are not recognizing the progress banks have made in raising capital, improving liquidity, beefing up risk management and bolstering credit quality. Requiring more capital, especially the up to 2.5% surcharge for the largest, most complex banks, they argued, will depress lending and prevent an economic recovery.
They also warned regulators that their crackdown would backfire by stoking the shadow banking system.
"The regulatory solution has been to just put more and more capital into the regulated banks," Cohn said. "What I think will happen is our clients will now have a whole new variety of second-tier, third-tier and fourth-tier entities. These shadow banks in essence will become even a bigger part of the system."
Regulators concede Cohn's point is a concern. They are worried their tough rules will steer business to unregulated providers. Carney spent the bulk of his remarks on ways to avoid this.
Banker complaints are also resonating on the liquidity piece of the Basel III rules. Those rules will be amended before they are implemented and the industry still has an opportunity to influence them.
But the ship has sailed on capital, and it would be in bankers' interest to focus more attention on what's still to come from policymakers.
Most of what bankers have seen to date from various government agencies is designed to curb what regulators call micro-prudential risk, or the risk posed by individual companies.
Regulators are turning now to macro-prudential oversight, which is designed to protect the financial system as a whole.
"We are really talking about reducing the likelihood of unpleasant outcomes some time in the very distant future," Ingves said. "That means that there will always be people in the short run who will argue that this position is terribly wrong right now."
Adair Turner, the chairman of the UK's Financial Services Authority, noted at the Bretton Woods confab that policymakers have created institutions to detect and arrest systemic risk.
The UK has its Financial Policy Committee, the EU has its European Systemic Risk Board and the US has its Financial Stability Oversight Council.
"Clearly this is a vital area -- 2008 was a macro-systemic crisis," Turner said. "What we know is the risks created by excessive credit growth…cannot be offset by micro-prudential regulation alone….We need to build macro-prudential analysis and tools to identify and offset the build up of systemic risks and in particular to lean against the credit cycle.
"Much work is going on to define what the appropriate macro-prudential tools are," he said. "Clearly, countercyclical capital is important."
Countercyclical capital is one of three surcharges the Basel Committee wants to impose on the largest banks. It would be triggered during economic booms, the idea being banks should pad their capital cushions in good times as protection against future losses.
Expect more details on macro-prudential rules this fall on everything from compensation policies to risk management practices to limits on concentration and risk exposures.
The Fed will weigh in soon with its proposal for "enhanced" supervision of the largest banks as required by the Dodd-Frank Act, and the Financial Stability Board has promised to complete its macro-prudential recommendations before the G-20 meets in Cannes, France, in early November.
Bankers ought to be preparing for what's coming rather than continuing to fight what's not going to change.